Essential Business Definitions and Legal Compliance
Classified in Economy
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Business Structures and Liability
Sole Proprietorship
A business owned by only one person.
Partnership
A business owned by two or more persons who share the risks and rewards.
Corporation
A business treated by law as separate from its owners.
Cooperative
An organization or business owned and operated by its members, who pool their resources and share the benefits.
Unlimited Liability
Full legal and financial responsibility for a business.
Limited Liability
Financial responsibility of business owners only for what they invested in the business.
Nonprofit Organization
A business whose main purpose is to provide a service rather than to make a profit.
Supply Chain, Operations, and Ownership
Producer
A business that gathers raw materials in their natural state.
Processors
Businesses that change raw goods into more finished products.
Manufacturers
Businesses that make finished products out of raw or processed goods.
Intermediary
A business that acts as a go-between in moving goods from producers to consumers. Examples include wholesalers, retailers, and distributors.
Wholesaler
A type of business that buys goods in large amounts and resells them to other businesses in smaller lots.
Retailer
A business that sells goods or services directly to the public.
Franchise
A contractual agreement to use the name and sell the goods or services of an existing company.
Stock
Shares of ownership in a corporation.
Business Ethics and Regulatory Compliance
Ethics
A set of moral principles by which people conduct themselves personally, socially, or professionally.
Business Ethics
The rules that govern how businesses should conduct themselves.
Code of Ethics
A strict set of guidelines in a profession or company for upholding ethical behavior in the workplace.
Social Responsibility
The obligation to do what is best for the welfare of society.
Conflict of Interest
When a business puts its interests before the interests of society.
Sweatshops
Factories that pay poorly, have unsafe working conditions, and treat workers badly.
Key Regulatory Agencies and Laws
OSHA (Occupational Safety and Health Administration)
A division of the Department of Labor that sets and enforces work-related health and safety rules.
FDA (Food and Drug Administration)
A government agency that protects consumers from dangerous or falsely advertised products.
Environmental Protection Agency (EPA)
A federal agency that enforces rules to protect the environment and control pollution.
Equal Pay Act
A federal law requiring that men and women be paid the same wages for doing equal work.